Magazine article Management Today

Rise above the Crowd

Magazine article Management Today

Rise above the Crowd

Article excerpt

No more 'me too'. Since when was running with the corporate herd good for a company's performance? Contrarian champion Alastair Dryburgh demonstrates the power of being unique.

We're number two - we try harder. So went the old slogan from car hire firm Avis. Memorable marketing, but is it any way to run a business? Avis has been trying harder for as long as I can remember (and that's a long time now), but it's still only number two.

The problem with companies like Avis - across a diverse range of markets - is that they just aren't different enough. The days when it was possible to thrive simply by doing the same thing as the competition, only a little bit better, are long gone. Distinctiveness is now the name of the game.

So, if you want to escape a lifetime of trying ever harder for only average rewards, you'll have to come up with something really different to offer your customers. To this end, MT has gathered together a few examples of Contrarian Champions whose example we can learn from - companies that have deliberately separated themselves from the pack - and outperformed their rivals' vanilla offerings as a result.

Especially in times of economic hardship, it seems, being different can make all the difference. Just look at the winner of the latest MT Britain's Most Admired Companies Awards: BSkyB. Here's a company that is most assuredly not part of the regular media pack, and yet it has shown a clean pair of heels to its rivals - in terms of both commerce and its reputation - over the past 18 months.

So how do you create the right kind of difference, the smart, innovative strategies that lead to the sunlit uplands of success? The techniques used to generate difference by our contrarian champions can be summarised as follows: one, focus on the customer; two, use the ideas of Michael Porter (even if you don't read his books; and three, steal.

Customer focus is important, because it can help you to see beyond industry orthodoxy and understand why people buy from you rather than go somewhere else. It requires a different mindset and the ability to cast aside those cherished, but often erroneous, shibboleths about what can and cannot be done, that all businesses create for themselves.

Stand back. Stop thinking like the operator and start thinking like a customer. Better, talk to real customers. Or, better still, to real non-customers. What do they want? What is missing for them?

Customer focus is important all the time, and is one of the main advantages that small firms enjoy over their apparently stronger and more profitable larger rivals. In good economic times, it's almost inevitable that, for big companies, the needs of customers will drop down the list of corporate priorities, to some degree. This creates an opportunity for small firms with a distinctive customer offering to move in and clean up.

Knowing your customers is especially useful at times of abrupt and unexpected change - a recession, for example. Having a strong sense of why people buy from you as well as what they buy can help you to avoid damaging knee-jerk responses. Is everyone else in your sector rushing downmarket in anticipation of a boom in demand for cut-price 'value' offerings? If you stick it out at the top of the market, you might be able to grab for yourself a big chunk of the tasty high-margin business that remains.

Harvard professor Michael Porter is among the world's leading thinkers on competitive strategy. He has identified one of the other great strengths of being different - that it promotes strategic clarity. If you are doing something different from what everyone else is up to, chances are you've put some real thought into developing that strategy, and it is thus more likely to be the right one for you.

Porter goes on to say that to be successful, you need to operate one of three basic strategies. You can differentiate, offering a superior product for a higher price (Reckitt); you can be a niche player, more perfectly matched to your segment of the market (Wetherspoon's); or you can have the lowest costs, so that you can make money at prices lower than anyone else can stand (Ryanair). …

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